iPhone Application Developers Fight Clones for Profits

The iPhone and iPod Touch application store launched in July, and a few days ago the store hit the 10,000 applications milestone. But the landscape for iPhone developers can be harsh: Copycat applications are rampant, and 24 percent of the 10,000 applications are free. PM speaks to several app developers about how to succeed in the high-speed sink-or-swim world of the iPhone application store.

If someone asked you to design a product that may or may not be sold, that may or may not receive promotion, that may or may not meet an unspecified review criteria but if approved is almost sure to be copied, you'd probably tell him to take a hike.

Unless that someone were Apple.

Creating a program for the iPhone or iPod Touch requires a sort of blind faith. Armed only with an Apple-provided software development kit, developers create applications that will have inherently limited functionality. Apple does not permit third party software to run in the background of general iPhone operations, let alone take advantage of hardware capabilities like the iPhone's video-ready camera.

Once an app is complete, it still faces what's been described more than once as a set of "mysterious" approval guidelines--no one knows Apple's methodology or reasoning in deciding an application's fate. If approved, the lucky software is distributed alongside the 10,000 competitors already waiting in the App Store. If it's not approved, well, there's always the next app.

Why would any talented programmer in his right mind tolerate such a hassle? Simple. There's gold in them hills.

Michael Schneider is a successful lawyer in Seattle who works with major clients like Bungie Studios, the makers of Halo. In his spare time, Schneider is the founder of HiveBrain, a one-man development company that programs utilities for the iPhone.

While he has released a handful of applications, Schneider's most successful product to date is TouchType, a program that allows iPhone users to type emails in landscape mode with a wider, easier to use keyboard than the iPhone default touch keyboard. Since its release in October, this $1 app has sold over 70,000 copies, with 70-cents of each sale going back to HiveBrain. Not bad for a part time job.

"It's a good income. I could easily be doing that full time and live off the money," Schneider explains.

But good money is not what all software developers are after--a growing amount of free software threatens the livelihood of developers like Schneider. Take Firemail, a program by Conceited Softwarer that allows iPhone users to type emails in landscape mode--for free. Since its release--roughly a week after TouchType-- "dozens of thousands" of people have downloaded the application daily, according to the company. Given that impressive rate of early distribution, it's likely that Firemail has been even more popular than TouchType.

"With Firemail, we saw an opportunity to provide a benefit to the iPhone community by releasing a workaround for the iPhone's internal Mail.app," Nicolas Lapomarda, co-founder of Conceited Software, explained. "In our opinion, this workaround was not worth charging for."

The kicker? TouchType was under Apple review for two months before its release to the App Store in October. Firemail was under review for less than a week. Apple didn't respond to our questions regarding this or any App Store anomalies.

"If something is controversial or questionable, it might get flagged for further review," Schneider reasoned, in attempt to explain the delay of his product's release. "[TouchType] might imply that people weren't satisfied with the [iPhone's] portrait mode keyboard."

On the surface, a program that rotates a cell phone's keyboard is far from controversial. TouchType contains no violence, nudity or foul language. It doesn't challenge the stability of the iPhone platform, nor does it make use of advanced networking functions that could distribute unencrypted data to malicious parties.

Then again, it's also possible that Apple did not find TouchType "controversial" at all. Instead, the application could have been delayed for suspicions that it duplicated preexisting iPhone functions, a well-documented reason for App Store rejection. The App Store review process simply isn't transparent enough to know what happened here, and Apple isn't forthcoming with details on the matter. But in general, if an iPhone application performs a function that Apple has never seen before, the review process may take longer than similar, or even cloned apps, take to pass through the same Apple quality control measures at a later date.

This can lead to the stalest, most overplayed applications having the fastest rates of approval. Breakout, anyone?

Nevertheless, "You've got to be first," Schneider advises. "The thing about the App Store is that I fully expect anything I put out on the App Store will be fully knocked off in a couple weeks. It just seems to be the nature."

Schneider's company HiveBrain was the first to market with another iPhone application known as Private-I, a $1 app that uses the iPhone's integrated GPS to track a stolen handset. A few months later, a two-person company named Kickoo released a similar program with similar iconography named TopSecret for the slightly higher price of $3.

Kickoo co-founder Daniel Morais explains his reasoning in creating another version of an application that already existed to PM: "When I first decided to work on this project, I checked the App Store to see how many similar applications already existed on the iPhone and was very surprised to find that only one was published. For other projects/ideas I wanted to work on, it was usually more like dozens of existing apps."

Morais continues, "I decided that it was worth trying to release another related program and compete with the other application by trying to provide more features and charge a little bit more, which I think is a fair attitude with both the other developer and customers."

During its first week of release in late November, TopSecret sold 1,200 copies--not a runaway hit, as an application's first two weeks in the store are generally its most successful--but TopSecret is still achieving higher than average sales and could produce more revenue in the long run than Private-I.

If this scenario of seems like a legal gray area, that's because it is. Copyright is particularly difficult to enforce in Apple's "who's on first" marketplace. "In the past, people relied on getting out there first [to establish intellectual property], marketing, and then maintaining a lead over the clones," explained Jeffrey D. Neuburger, IP specialist and Partner at Proskauer Rose. "But with something like the App Store, it's hard to even get a first mover advantage."

Though Schneider's a lawyer himself, he tells PM he's not interested in pursuing these particular App store challengers in the legal arena. "I would rather be thinking about the next great app than trying to fight over stuff that has already be done," he says. But all of this pressure from both free and pay apps has forced him to change strategies regarding his original ideas. To stay competitive with clones Firemail and TopSecret, Schneider has relented and released free "lite" versions of both TouchType and Private-I. Neither app brings his company any direct revenue.

"I'd rather have people using my version than someone else's," Schneider confesses. Spoken like a guy who's keeping his day job.

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